Reports that the UK is now in a recession, increased unemployment and continued financial market instability have almost certainly had a significant impact on consumer confidence in November.
The only index to see a rise this month was the Spending Index, which increased from 56 in October to 64 in November. This is, however, more likely to reflect consumers' observations of lower prices rather than their intention to buy. Confidence in the current economic and labour markets fell to 30 during the month, while the Expectations Index fell to 63 in November, perhaps driven by the realisation that a rapid turnaround in the economy and labour market is unlikely.
Fionnuala Earley, Nationwide's chief economist, said: "Consumer confidence dropped again this month against the backdrop of an emerging recession in the UK and continued global economic uncertainty. Reports of job cuts have almost certainly impacted on sentiment about the present and future employment situation, causing purse strings to tighten further, even as the festive season gets underway. It remains to be seen whether the Chancellor's recent announcement will greatly improve consumer confidence."
